AT&T and other carriers subsidize the upfront cost of the iPhone and other smartphones and make up the difference via guaranteed long term contracts/commitments. That's their business model, but it means they can't and won't give repeated subsidies until you've finished the associated contract terms. With many iPhone 3G owners -- still under contract -- eyeing the iPhone 3G S, and the non-subsidized price it brings with it, a fair amount of anger has been plasma-cannoned in AT&T's monstrous direction.

Gizmodo's Jesus Diaz, however, gives a nasty spoonful of reality medicine to those of us who bought heavily subsidized iPhones last year, and are upset we can't get the same subsidy again this year:

The fact is that the $199/$299 price tag for the iPhone is the result of AT&T's—or any other carrier, since the situation is the same all around the world—subsidy. Without subsidy—and tying you to a new two year contract—the iPhone is not different from something like the Nokia N97, which is $700 unlocked. Or the contract-free, unsubsidized iPhone 3G itself: The iPhone 3G costs $770 and $877 unlocked for the 8 and 16GB versions.

He goes on to kick the telcos heartily in their nether-regions as well, pointing out their exorbitant monthly charges, but takes issue with the sense of "entitlement" in modern consumer culture.

If you don't like it? His advice is to not buy the new iPhone 3G S and wait until next year when you can get a subsidy.

(I'm locked into a 3 year contract which currently has an early termination fee of ~$500, so I feel that pain...)

And in the mean time?

do the rest of the world a favor and stop whining about what you are entitled to. We don't live in your pretty me me me ME world.

NB: Delayed MMS deployment and lack of anything approaching information on tethering, however -- totally AT&T hate worthy...